The New York stock market saw a sharp decline on Tuesday.
The market, which had rebounded on Monday following reports that Iran was seeking negotiations, reversed course after just one day.
Israel declared there would be no negotiations with Iran, asserting that the only ongoing negotiations were between Israeli missiles and Iranian leadership.
U.S. President Donald Trump further stoked Middle East tensions.
Trump convened an urgent national security meeting in the White House Situation Room. CNN, citing sources, reported that Trump is leaning towards military action against Iranian nuclear facilities rather than diplomatic solutions.
Fear Index Surges Past 20
Hopes for a diplomatic resolution to the Israel-Iran conflict vanished within 24 hours.
The Dow Jones Industrial Average closed down 299.29 points (0.70%) to 42,215.80.
The S&P 500, a broader market indicator, dipped below the 6,000 mark again, ending the session down 50.39 points (0.84%) at 5,982.72.
The Nasdaq Composite fell 180.12 points (0.91%) to 19,521.09.
The CBOE Volatility Index (VIX), Wall Street’s fear gauge, breached the psychological resistance level of 20 once more.
The VIX spiked 2.49 points (13.03%) to close at 21.60.
Tesla Plunges 3.9%
All major tech stocks, including Tesla, saw significant declines.
Tesla’s stock price plummeted 12.78 USD (3.88%) to 316.35 USD.
Tesla is set to launch a limited autonomous taxi service this Sunday in Austin, Texas, where its headquarters is located. Expert opinions are divided on whether this development is already priced into the stock or if there is potential for further surge.
Weak demand for Tesla’s vehicles also contributed to the stock’s decline.
According to a FactSet survey, Wall Street analysts project Tesla’s Q2 deliveries at around 400,000 units, down 10% year-over-year. While this represents an improvement from the 13% drop in Q1, the persistent double-digit decline in electric vehicle sales remains a significant headwind for the company.
Nvidia fluctuated throughout the day before closing down 0.57 USD (0.39%) at 144.12 USD, while Apple shed 2.78 USD (1.40%) to end at 195.64 USD.
Microsoft also slipped, losing 1.10 USD (0.23%) to close at 478.04 USD.
Solar Stocks Plummet
Solar energy companies faced a brutal sell-off.
The sector was shocked by the bill introduced by the Republican Party, which regained control of the Senate in last year’s elections. The legislation proposed to roll back tax benefits for solar and wind energy implemented by the Biden administration.
Contrary to expectations of a compromise, the proposed bill aims to gradually phase out tax benefits for solar and wind energy investments starting next year, with complete elimination by 2028.
Concerns are growing that the solar industry will be severely impacted if these tax credits disappear, especially as the adoption of residential solar power is already facing challenges.
Sunrun shares plummeted 3.86 USD (40.04%) to 5.78 USD, while SolarEdge Technologies nosedived 8.02 USD (33.44%) to 15.96 USD.
First Solar tumbled 31.35 USD (17.89%) to 143.90 USD, and Enphase Energy plunged 11.01 USD (23.97%) to 34.92 USD.
